Anham billed the U.S. government $80 for this PVC
plumbing elbow, 5,574% more than a competitor’s
offer of $1.41.
$11.4 million reviewed. As a result of the
problems identified in this report, SIGIR
has formally questioned all costs on this
contract and recommended that the U.S.
military initiate a systematic review of
billing practices on all Anham contracts
in Iraq and Afghanistan.
In another notable audit, SIGIR
reviewed DoD use of FY 2011 Commander’s Emergency Response Program
(CERP) funds, concluding that many
of the capacity-development projects
undertaken were not linked to specific
military objectives. This audit found that
DoS officials played a significant role in
planning and executing CERP projects, raising questions about whether
the CERP has simply become another
U.S. development program. In a related
audit, SIGIR reviewed the Iraq CERP
(I-CERP), a program under which the
U.S. military has implemented reconstruction projects using Iraqi funds.
SIGIR determined that USF-I’s management led to U.S. funds being spent
unnecessarily. SIGIR found that $24.4
million in I-CERP funds remain that
could be used to finance reconstruction
projects with Iraqi funds instead of U.S.
taxpayer dollars.
Three other SIGIR audits published
this quarter found that:
• Plans for monitoring serious incidents
involving private security contractors
(PSCs) after the U.S. military withdraws from Iraq remain uncertain.
• About 40% of surveyed U.S. government CORs responsible for monitoring Theater-wide Internal Security
Services (TWISS) contracts had not
received adequate training. In addition, the CORs are not preparing, and
the Defense Contract Management
Agency is not maintaining, adequate
documentation necessary for determining whether security contractors
comply with the terms of task orders.
• DoS has taken sufficient action to
warrant closing 13 of 45 SIGIR audit
recommendations. Although DoS
claims to have closed 38 of the 45
recommendations, SIGIR was unable
to close 25 of them because DoS did
not provide sufficient documentation.
To date, SIGIR has issued 194 audit
reports and is working on 12 ongoing
audit projects. In June, SIGIR announced
its third audit on the U.S. management
of Iraqi funds in the Development
Fund for Iraq (DFI). A SIGIR audit
in 2005 had found weak controls for
approximately $8.8 billion in DFI
funds, and a 2010 audit determined that
another $8.7 billion in DFI funds was not
properly accounted for. SIGIR is working
with the GOI and DoD to account for
all DFI funds and, to date, has found
nothing to support contentions that
these funds were stolen.
SIGIR Investigations
SIGIR’s investigative work has resulted in
35 arrests, 64 indictments, 54 convictions,
and more than $153.9 million in fines,
forfeitures, restitution payments, and
other court-ordered monetary penalties. Significant investigative accomplishments this quarter included:
• DynCorp International LLC
and its subcontractor, The Sandi
Group, agreed to pay more than
$8 million to the United States as
part of a settlement agreement
resolving allegations of submitting
false claims for payment under
DynCorp’s police-training contract
with DoS.
• Two former U.S. Army majors pled
guilty in related cases for accepting
bribes from contractors that provided
bottled water to U.S. troops. The two
were part of a wide-ranging conspiracy to defraud the U.S. government that SIGIR has been investigating since 2006 and that, to date, has
resulted in 18 convictions.
• A former U.S. Army sergeant first
class pled guilty to conspiring with
a U.S. Army translator to steal eight
generators from a U.S. base in Mosul
and resell them on the black market.
He admitted to receiving more than
$40,000 for his role in the plot and
faces up to five years in prison.
• A U.S. Army sergeant first class and
a former U.S. Army master sergeant
were indicted for their role in a bribery
and money-laundering scheme
centered on the improper disclosure of
information to two contracting firms
that ultimately received almost $25 million in U.S. government contracts.
• The former president of a DoD
contractor pled guilty to conspiracy
and bribery charges related to multimillion-dollar contracts with the
Coalition Provisional Authority for
warehouses and with the U.S. Army
for support of operations in Iraq.
As of July 15, SIGIR investigators were
working on 104 open cases.
TO OBTAIN A FULL REPORT
Visit the SIGIR Website www.sigir.mil • email PublicAffairs@sigir.mil • call 703.428.1100
JULY
SIGIR QUARTERLY REPORT
2011
SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION
A SUMMER OF UNCERTAINTY
Negotiations continued this quarter
between the U.S. government and the
Government of Iraq (GOI) on the possibility of a continuing U.S. military presence
in Iraq after December 31, 2011. While
Prime Minister Nuri al-Maliki is open to
that possibility, the fractious Iraqi political
situation—and the ominous opposition of
Muqtada al-Sadr and his restive supporters—have made it difficult to forge support
for an extension within the GOI.
U.S. Transitions
As of mid-July, approximately 43,800
personnel of the U.S. Forces-Iraq (USF-I)
continue to prepare for their planned
withdrawal from Iraq by year’s end. As
USF-I rapidly draws down, the Department of State (DoS) will concomitantly
increase its presence, and the scope of its
mission will expand. This quarter, DoS
inaugurated new consulates in Basrah
and Erbil, providing a permanent diplomatic presence in the oil-rich south and
Kurdish north. DoS also intends to open
a temporary consulate in Kirkuk, but
plans for a presence in Mosul have been
placed on hold.
On October 1, 2011, DoS will assume
responsibility for two key security missions now managed by the U.S. military:
• The Office of Security CooperationIraq (OSC-I) will be responsible
for ties with the Iraqi armed forces.
OSC-I will fall under the authority of
the Chief of Mission and will advise,
train, and assist the Iraqi military
and manage U.S.-funded securityassistance programs.
• The DoS Bureau of International Narcotics and Law Enforcement Affairs (INL)
will take charge of continuing to build
the capacity of the Iraqi police. About
190 INL staff will operate out of 3 sites,
visiting more than 20 subsidiary locations
to train police across 10 provinces.
Increased Violence
These transitions are being executed
against the backdrop of an increasingly
violent Iraq. This quarter, Iranian-backed
Shia militias launched deadly attacks on
U.S. troops, and the International Zone
(IZ) came under multiple indirect-fire attacks. In one attack, 11 rockets struck the
IZ—the highest number for a single day
in more than two years. Attacks continued
against GOI personnel, with several large
bombings targeting Iraqi police. Scores of
senior officials, including judges, generals, and mayors, were assassinated or
wounded this quarter.
Iraq’s Economy
The Iraqi economy continues to boom
as crude oil prices remained high and
both production and exports edged past
previous quarterly records. Oil revenues
contributed to an increase in real gross
domestic product growth that the International Monetary Fund projects may
exceed 12% for 2011 (compared with
an estimated 0.8% in 2010). Maintaining this robust growth rate in the years
to come will be challenging because of
a series of interrelated problems that
continue to affect the Iraqi economy.
For example:
• The GOI’s oil production target of
12 million barrels per day by 2017
might be unrealistic given Iraq’s weak
infrastructure and the uncertain security and legal environments.
• Electricity shortages continue because
the amount of power supplied to
the national grid remains far below
demand. While dozens of electricityrelated construction projects are
underway or planned, the Deputy
Prime Minister for Energy Affairs acknowledged that significant improvements are unlikely to occur before
mid-2012.
On July 16, 2011, a bomb in a minibus parked outside
a Baghdad restaurant killed or wounded several
people. (AP Images/Khalid Mohammed)
Iraq’s large public sector continues to
occupy a dominant position in the nonoil economy, and corruption remains
an enduring challenge. This quarter,
however, one of the main impediments
facing the GOI’s anticorruption agencies
was removed with the repeal of Article
136(b) of the Iraqi Criminal Procedure
Code. This provision, which had allowed
ministers to block investigations into the
activities of subordinates, was frequently
invoked to shield corrupt government
officials from prosecution.
SIGIR Audits
SIGIR issued six audit reports this quarter, including a review of U.S. government oversight of Anham, LLC, a large
Department of Defense (DoD) contractor. The audit found weak government
contract oversight in multiple areas. Government contracting officer’s representatives (CORs) failed to compare vouchers
with receiving documents and allowed
Anham employees to sign for receipt
of $10 million in goods. Moreover, a
limited incurred-cost review questioned
39% of the charges—$4.4 million of the
Anham billed the U.S. government $80 for this PVC
plumbing elbow, 5,574% more than a competitor’s
offer of $1.41.
$11.4 million reviewed. As a result of the
problems identified in this report, SIGIR
has formally questioned all costs on this
contract and recommended that the U.S.
military initiate a systematic review of
billing practices on all Anham contracts
in Iraq and Afghanistan.
In another notable audit, SIGIR
reviewed DoD use of FY 2011 Commander’s Emergency Response Program
(CERP) funds, concluding that many
of the capacity-development projects
undertaken were not linked to specific
military objectives. This audit found that
DoS officials played a significant role in
planning and executing CERP projects, raising questions about whether
the CERP has simply become another
U.S. development program. In a related
audit, SIGIR reviewed the Iraq CERP
(I-CERP), a program under which the
U.S. military has implemented reconstruction projects using Iraqi funds.
SIGIR determined that USF-I’s management led to U.S. funds being spent
unnecessarily. SIGIR found that $24.4
million in I-CERP funds remain that
could be used to finance reconstruction
projects with Iraqi funds instead of U.S.
taxpayer dollars.
Three other SIGIR audits published
this quarter found that:
• Plans for monitoring serious incidents
involving private security contractors
(PSCs) after the U.S. military withdraws from Iraq remain uncertain.
• About 40% of surveyed U.S. government CORs responsible for monitoring Theater-wide Internal Security
Services (TWISS) contracts had not
received adequate training. In addition, the CORs are not preparing, and
the Defense Contract Management
Agency is not maintaining, adequate
documentation necessary for determining whether security contractors
comply with the terms of task orders.
• DoS has taken sufficient action to
warrant closing 13 of 45 SIGIR audit
recommendations. Although DoS
claims to have closed 38 of the 45
recommendations, SIGIR was unable
to close 25 of them because DoS did
not provide sufficient documentation.
To date, SIGIR has issued 194 audit
reports and is working on 12 ongoing
audit projects. In June, SIGIR announced
its third audit on the U.S. management
of Iraqi funds in the Development
Fund for Iraq (DFI). A SIGIR audit
in 2005 had found weak controls for
approximately $8.8 billion in DFI
funds, and a 2010 audit determined that
another $8.7 billion in DFI funds was not
properly accounted for. SIGIR is working
with the GOI and DoD to account for
all DFI funds and, to date, has found
nothing to support contentions that
these funds were stolen.
SIGIR Investigations
SIGIR’s investigative work has resulted in
35 arrests, 64 indictments, 54 convictions,
and more than $153.9 million in fines,
forfeitures, restitution payments, and
TO OBTAIN A FULL REPORT
other court-ordered monetary penalties. Significant investigative accomplishments this quarter included:
• DynCorp International LLC
and its subcontractor, The Sandi
Group, agreed to pay more than
$8 million to the United States as
part of a settlement agreement
resolving allegations of submitting
false claims for payment under
DynCorp’s police-training contract
with DoS.
• Two former U.S. Army majors pled
guilty in related cases for accepting
bribes from contractors that provided
bottled water to U.S. troops. The two
were part of a wide-ranging conspiracy to defraud the U.S. government that SIGIR has been investigating since 2006 and that, to date, has
resulted in 18 convictions.
• A former U.S. Army sergeant first
class pled guilty to conspiring with
a U.S. Army translator to steal eight
generators from a U.S. base in Mosul
and resell them on the black market.
He admitted to receiving more than
$40,000 for his role in the plot and
faces up to five years in prison.
• A U.S. Army sergeant first class and
a former U.S. Army master sergeant
were indicted for their role in a bribery
and money-laundering scheme
centered on the improper disclosure of
information to two contracting firms
that ultimately received almost $25 million in U.S. government contracts.
• The former president of a DoD
contractor pled guilty to conspiracy
and bribery charges related to multimillion-dollar contracts with the
Coalition Provisional Authority for
warehouses and with the U.S. Army
for support of operations in Iraq.
As of July 15, SIGIR investigators were
working on 104 open cases.
Visit the SIGIR Website www.sigir.mil • email PublicAffairs@sigir.mil • call 703.428.1100
SIGIR QUARTERLY REPORT
SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION
Iraq’s Economy
The Iraqi economy continues to boom
as crude oil prices remained high and
both production and exports edged past
previous quarterly records. Oil revenues
contributed to an increase in real gross
domestic product growth that the International Monetary Fund projects may
exceed 12% for 2011 (compared with
an estimated 0.8% in 2010). Maintaining this robust growth rate in the years
to come will be challenging because of
a series of interrelated problems that
continue to affect the Iraqi economy.
For example:
• The GOI’s oil production target of
12 million barrels per day by 2017
might be unrealistic given Iraq’s weak
infrastructure and the uncertain security and legal environments.
• Electricity shortages continue because
the amount of power supplied to
the national grid remains far below
demand. While dozens of electricityrelated construction projects are
underway or planned, the Deputy
Prime Minister for Energy Affairs acknowledged that significant improvements are unlikely to occur before
mid-2012.
These transitions are being executed
against the backdrop of an increasingly
violent Iraq. This quarter, Iranian-backed
Shia militias launched deadly attacks on
U.S. troops, and the International Zone
(IZ) came under multiple indirect-fire attacks. In one attack, 11 rockets struck the
IZ—the highest number for a single day
in more than two years. Attacks continued
against GOI personnel, with several large
bombings targeting Iraqi police. Scores of
senior officials, including judges, generals, and mayors, were assassinated or
wounded this quarter.
Increased Violence
A SUMMER OF UNCERTAINTY
Negotiations continued this quarter
between the U.S. government and the
Government of Iraq (GOI) on the possibility of a continuing U.S. military presence
in Iraq after December 31, 2011. While
Prime Minister Nuri al-Maliki is open to
that possibility, the fractious Iraqi political
situation—and the ominous opposition of
Muqtada al-Sadr and his restive supporters—have made it difficult to forge support
for an extension within the GOI.
U.S. Transitions
As of mid-July, approximately 43,800
personnel of the U.S. Forces-Iraq (USF-I)
continue to prepare for their planned
withdrawal from Iraq by year’s end. As
USF-I rapidly draws down, the Department of State (DoS) will concomitantly
increase its presence, and the scope of its
mission will expand. This quarter, DoS
inaugurated new consulates in Basrah
and Erbil, providing a permanent diplomatic presence in the oil-rich south and
Kurdish north. DoS also intends to open
a temporary consulate in Kirkuk, but
plans for a presence in Mosul have been
placed on hold.
On October 1, 2011, DoS will assume
responsibility for two key security missions now managed by the U.S. military:
• The Office of Security CooperationIraq (OSC-I) will be responsible
for ties with the Iraqi armed forces.
OSC-I will fall under the authority of
the Chief of Mission and will advise,
train, and assist the Iraqi military
and manage U.S.-funded securityassistance programs.
• The DoS Bureau of International Narcotics and Law Enforcement Affairs (INL)
will take charge of continuing to build
the capacity of the Iraqi police. About
190 INL staff will operate out of 3 sites,
visiting more than 20 subsidiary locations
to train police across 10 provinces.
JULY
2011
On July 16, 2011, a bomb in a minibus parked outside
a Baghdad restaurant killed or wounded several
people. (AP Images/Khalid Mohammed)
Iraq’s large public sector continues to
occupy a dominant position in the nonoil economy, and corruption remains
an enduring challenge. This quarter,
however, one of the main impediments
facing the GOI’s anticorruption agencies
was removed with the repeal of Article
136(b) of the Iraqi Criminal Procedure
Code. This provision, which had allowed
ministers to block investigations into the
activities of subordinates, was frequently
invoked to shield corrupt government
officials from prosecution.
SIGIR Audits
SIGIR issued six audit reports this quarter, including a review of U.S. government oversight of Anham, LLC, a large
Department of Defense (DoD) contractor. The audit found weak government
contract oversight in multiple areas. Government contracting officer’s representatives (CORs) failed to compare vouchers
with receiving documents and allowed
Anham employees to sign for receipt
of $10 million in goods. Moreover, a
limited incurred-cost review questioned
39% of the charges—$4.4 million of the
Anham billed the U.S. government $80 for this PVC
plumbing elbow, 5,574% more than a competitor’s
offer of $1.41.
$11.4 million reviewed. As a result of the
problems identified in this report, SIGIR
has formally questioned all costs on this
contract and recommended that the U.S.
military initiate a systematic review of
billing practices on all Anham contracts
in Iraq and Afghanistan.
In another notable audit, SIGIR
reviewed DoD use of FY 2011 Commander’s Emergency Response Program
(CERP) funds, concluding that many
of the capacity-development projects
undertaken were not linked to specific
military objectives. This audit found that
DoS officials played a significant role in
planning and executing CERP projects, raising questions about whether
the CERP has simply become another
U.S. development program. In a related
audit, SIGIR reviewed the Iraq CERP
(I-CERP), a program under which the
U.S. military has implemented reconstruction projects using Iraqi funds.
SIGIR determined that USF-I’s management led to U.S. funds being spent
unnecessarily. SIGIR found that $24.4
million in I-CERP funds remain that
could be used to finance reconstruction
projects with Iraqi funds instead of U.S.
taxpayer dollars.
Three other SIGIR audits published
this quarter found that:
• Plans for monitoring serious incidents
involving private security contractors
(PSCs) after the U.S. military withdraws from Iraq remain uncertain.
• About 40% of surveyed U.S. government CORs responsible for monitoring Theater-wide Internal Security
Services (TWISS) contracts had not
received adequate training. In addition, the CORs are not preparing, and
the Defense Contract Management
Agency is not maintaining, adequate
documentation necessary for determining whether security contractors
comply with the terms of task orders.
• DoS has taken sufficient action to
warrant closing 13 of 45 SIGIR audit
recommendations. Although DoS
claims to have closed 38 of the 45
recommendations, SIGIR was unable
to close 25 of them because DoS did
not provide sufficient documentation.
To date, SIGIR has issued 194 audit
reports and is working on 12 ongoing
audit projects. In June, SIGIR announced
its third audit on the U.S. management
of Iraqi funds in the Development
Fund for Iraq (DFI). A SIGIR audit
in 2005 had found weak controls for
approximately $8.8 billion in DFI
funds, and a 2010 audit determined that
another $8.7 billion in DFI funds was not
properly accounted for. SIGIR is working
with the GOI and DoD to account for
all DFI funds and, to date, has found
nothing to support contentions that
these funds were stolen.
SIGIR Investigations
SIGIR’s investigative work has resulted in
35 arrests, 64 indictments, 54 convictions,
and more than $153.9 million in fines,
forfeitures, restitution payments, and
other court-ordered monetary penalties. Significant investigative accomplishments this quarter included:
• DynCorp International LLC
and its subcontractor, The Sandi
Group, agreed to pay more than
$8 million to the United States as
part of a settlement agreement
resolving allegations of submitting
false claims for payment under
DynCorp’s police-training contract
with DoS.
• Two former U.S. Army majors pled
guilty in related cases for accepting
bribes from contractors that provided
bottled water to U.S. troops. The two
were part of a wide-ranging conspiracy to defraud the U.S. government that SIGIR has been investigating since 2006 and that, to date, has
resulted in 18 convictions.
• A former U.S. Army sergeant first
class pled guilty to conspiring with
a U.S. Army translator to steal eight
generators from a U.S. base in Mosul
and resell them on the black market.
He admitted to receiving more than
$40,000 for his role in the plot and
faces up to five years in prison.
• A U.S. Army sergeant first class and
a former U.S. Army master sergeant
were indicted for their role in a bribery
and money-laundering scheme
centered on the improper disclosure of
information to two contracting firms
that ultimately received almost $25 million in U.S. government contracts.
• The former president of a DoD
contractor pled guilty to conspiracy
and bribery charges related to multimillion-dollar contracts with the
Coalition Provisional Authority for
warehouses and with the U.S. Army
for support of operations in Iraq.
As of July 15, SIGIR investigators were
working on 104 open cases.
TO OBTAIN A FULL REPORT
Visit the SIGIR Website www.sigir.mil • email PublicAffairs@sigir.mil • call 703.428.1100
JULY
SIGIR QUARTERLY REPORT
2011
SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION
A SUMMER OF UNCERTAINTY
Negotiations continued this quarter
between the U.S. government and the
Government of Iraq (GOI) on the possibility of a continuing U.S. military presence
in Iraq after December 31, 2011. While
Prime Minister Nuri al-Maliki is open to
that possibility, the fractious Iraqi political
situation—and the ominous opposition of
Muqtada al-Sadr and his restive supporters—have made it difficult to forge support
for an extension within the GOI.
U.S. Transitions
As of mid-July, approximately 43,800
personnel of the U.S. Forces-Iraq (USF-I)
continue to prepare for their planned
withdrawal from Iraq by year’s end. As
USF-I rapidly draws down, the Department of State (DoS) will concomitantly
increase its presence, and the scope of its
mission will expand. This quarter, DoS
inaugurated new consulates in Basrah
and Erbil, providing a permanent diplomatic presence in the oil-rich south and
Kurdish north. DoS also intends to open
a temporary consulate in Kirkuk, but
plans for a presence in Mosul have been
placed on hold.
On October 1, 2011, DoS will assume
responsibility for two key security missions now managed by the U.S. military:
• The Office of Security CooperationIraq (OSC-I) will be responsible
for ties with the Iraqi armed forces.
OSC-I will fall under the authority of
the Chief of Mission and will advise,
train, and assist the Iraqi military
and manage U.S.-funded securityassistance programs.
• The DoS Bureau of International Narcotics and Law Enforcement Affairs (INL)
will take charge of continuing to build
the capacity of the Iraqi police. About
190 INL staff will operate out of 3 sites,
visiting more than 20 subsidiary locations
to train police across 10 provinces.
Increased Violence
These transitions are being executed
against the backdrop of an increasingly
violent Iraq. This quarter, Iranian-backed
Shia militias launched deadly attacks on
U.S. troops, and the International Zone
(IZ) came under multiple indirect-fire attacks. In one attack, 11 rockets struck the
IZ—the highest number for a single day
in more than two years. Attacks continued
against GOI personnel, with several large
bombings targeting Iraqi police. Scores of
senior officials, including judges, generals, and mayors, were assassinated or
wounded this quarter.
Iraq’s Economy
The Iraqi economy continues to boom
as crude oil prices remained high and
both production and exports edged past
previous quarterly records. Oil revenues
contributed to an increase in real gross
domestic product growth that the International Monetary Fund projects may
exceed 12% for 2011 (compared with
an estimated 0.8% in 2010). Maintaining this robust growth rate in the years
to come will be challenging because of
a series of interrelated problems that
continue to affect the Iraqi economy.
For example:
• The GOI’s oil production target of
12 million barrels per day by 2017
might be unrealistic given Iraq’s weak
infrastructure and the uncertain security and legal environments.
• Electricity shortages continue because
the amount of power supplied to
the national grid remains far below
demand. While dozens of electricityrelated construction projects are
underway or planned, the Deputy
Prime Minister for Energy Affairs acknowledged that significant improvements are unlikely to occur before
mid-2012.
On July 16, 2011, a bomb in a minibus parked outside
a Baghdad restaurant killed or wounded several
people. (AP Images/Khalid Mohammed)
Iraq’s large public sector continues to
occupy a dominant position in the nonoil economy, and corruption remains
an enduring challenge. This quarter,
however, one of the main impediments
facing the GOI’s anticorruption agencies
was removed with the repeal of Article
136(b) of the Iraqi Criminal Procedure
Code. This provision, which had allowed
ministers to block investigations into the
activities of subordinates, was frequently
invoked to shield corrupt government
officials from prosecution.
SIGIR Audits
SIGIR issued six audit reports this quarter, including a review of U.S. government oversight of Anham, LLC, a large
Department of Defense (DoD) contractor. The audit found weak government
contract oversight in multiple areas. Government contracting officer’s representatives (CORs) failed to compare vouchers
with receiving documents and allowed
Anham employees to sign for receipt
of $10 million in goods. Moreover, a
limited incurred-cost review questioned
39% of the charges—$4.4 million of the